Project Management

Managing a Software Upgrade Project in an Energy Commodities Trading Environment

PMI Westchester, NY Chapter

1. Introduction and Background
Software upgrades are a necessary part of the information systems life cycle and there are various requirements that drive the need for upgrades. This document describes the processes and considerations involved in upgrading Energy Trading and Risk Management (ETRM) systems and how the principles, guidelines, and best practices of PMI and A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition (PMI, 2013) were applied and utilized for the successful deployment of system upgrade projects.

The core system used in energy trading is referred to as an ETRM system. These are very specialized and highly integrated front-to-back systems including market data, trades, positions and P&L, logistics, and operations. Peripheral, specialized third-party or internally developed systems such as VAR (value at risk) and accounting (GL and AR/AP) (e.g., JD Edwards, SAP, etc.) are usually interfaced to the ETRM system.

Software upgrades always entail risks, not only because the project may be delayed or costs may escalate, but more importantly because the new version may not function as expected or, worse still, something that was working before may be broken.

Being an integrated front-to-back system, there are always many interested stakeholders that have requirements for the upgrade, and it is difficult to satisfy …

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